You were hired as a consultant to Quigley Company:

Target capital structure is $35\%$ debt, $10\%$ preferred, and $55\%$ common equity

The interest rate on new debt is $10\mathrm{.}00\%$

The yield on the preferred is $6\mathrm{.}00\%$

The cost of retained earnings is $10\mathrm{.}50\%$

The tax rate is $25\%.$

a$.8\mathrm{.}00\%$

b$.9\mathrm{.}00\%$

c$.8\mathrm{.}50\%$

d$.7\mathrm{.}00\%$

e$.7\mathrm{.}50\%$